Neurofibromatosis type 1 (NF1) is a multi-system disease caused by mutations in the NF1 gene encoding a Ras-GAP protein, neurofibromin, which negatively regulates Ras signaling. Besides neuroectodermal malformations and tumors, the skeletal system is often affected (e.g. scoliosis and long bone dysplasia) demonstrating the importance of neurofibromin for development and maintenance of the musculoskeletal system. Here, we focus on the role of neurofibromin in skeletal muscle development. Nf1 gene inactivation in the early limb bud mesenchyme using Prx1-cre (Nf1^Prx1) resulted in muscle dystrophy characterized by fibrosis, reduced number of muscle fibers and reduced muscle force. This was caused by an early defect in myogenesis affecting the terminal differentiation of myoblasts between E12.5 and E14.5. In parallel, the muscle connective tissue cells exhibited increased proliferation at E14.5 and an increase in the amount of connective tissue as early as E16.5. These changes were accompanied by excessive mitogen-activated protein kinase pathway activation. Satellite cells isolated from Nf1^Prx1 mice showed normal self-renewal, but their differentiation was impaired as indicated by diminished myotube formation. Our results demonstrate a requirement of neurofibromin for muscle formation and maintenance. This previously unrecognized function of neurofibromin may contribute to the musculoskeletal problems in NF1 patients.